Tuesday, June 14, 2011

Exploited Labor, NGOs, Banks and Econ Dev

Rebecca emailed me, apropos of exploited labor discussion:

“Oppression is not a sustainable solution.”

To which I agreed, and inquired as to overcome the bad guys.

To which she replied,


“How do you overcome the bad guys? 

Simple. 

Stop focusing on the bad guys. There are plenty of good guys with innovative, community, global serving ideas.

Tell the world about good ideas.

(Name removed) is a non-profit organization dedicated to helping children and adults develop the necessary skills to be successful, positive contributors to their multi-cultural, bilingual community.”


To which I replied,

J: I'd be happy to argue this point with you, but it might get tough.  It does start with the bad guys, who took these peoples homes, and relocated them.  The bad guys did not respect the locals property rights.

Now these dispossessed people allow themselves to be under the aegis of USA-based assistance.  This is strange.  These people do not lack talent or intelligence.  There is nothing (name withheld) is doing that they cannot do for themselves.  Indeed, the "free english lessons" so they can work for their oppressors, sure sounds discouraging.  Not to mention the "free English lessons" rather ruins the job of the local who hoped to make a living teaching English.

These people are also rational.  As long as Americans are present, then they enjoy some level of protection.  When the Americans leave, the protection is gone, and anything they have will be taken.  To maintain a nice environment with no USA presence is to invite scrutiny from the bad guys.

Ultimately the bad guys are backed by USA.  People in Mexico who resist the bad guys will come up, ultimately, against USA power.  We need to withdraw USA support and assistance for Mexico, which surely can flourish without our intervention.  Certainly a different ethic, perhaps with even the same people in charge.

The people do not want charity, they want freedom. (Name Withheld) may seem like a good thing, but it is a band-aid on a wound from a knife in the back.  Better there is no knife in the back to begin with.

Why after 100 years of this kind of activity, for example on USA indian reservations, there are no examples of success? I recommend Michael Maren's "Road to Hell" about the "good guys" with innovative, community global serving ideas. It does not help to bring in charity.  It does help to bring in business.  If we really want to help people overseas, we'd make markets here for their products.  USA ships cheap frankenfoods in and destroys their ag economy, and then refuses to let them export garments.  The NGOs and charities are just palliative care for cultures targeted for euthanization.

 We do need to expose the bad guys, and trade with the good guys.  The bad guys care what others think.  The good guys want to be self-employed.


R: So can you see anything of value coming out of the bank helping communities to creating sustainable towns. Or it sounds like you think the community would be better figuring it out on their own? 

J: It is a non-sequitor to say these banks help communities create a sustainable town.  Banks don’t create anything, anymore than a restaurant or a doctors office does.  Properly constituted a bank may be necesary to create a town, but never sufficient.

It's not a matter of people figuring it out on their own, people know what to do: serve a customer.  it is a matter of being free of force and fraud which so distorts the market.

R: Many good, true points.
Thanks for the book recommendation. I imagine you have read Stiglitz.

J: Only to know he argues govts can some times do better than the market, and his proof is against the Chicago school, which is not free market.  The problem is these guys extrapolate from the narrower filed of market to all human activity, and argue against each others straw men.

R: Globalization is tricky. There are Americans living in foreign lands. Tourism is a big industry. Locals do make more money when they speak English. Along the lines of what you are saying, i've seen many locals learn English as they go. No classwork. No American ex-pat volunteer teaching them. They pick it up. Very impressive. Survival is a powerful motivator. The reality is, there will be foreigners living in different lands.

J: No objection to anyone living anywhere...  but the USA is a great distorter of local economies, causing winners and losers where once there was stability.   Clearing the banyan trees off the coasts to make room for resorts, and converting the fisherfolk to room service seemed like a good idea, but the Tsunami got them all.  If Americans want to live in Indonesia, don’t bring McDonalds and USA subsidized corn and its frankenfood by products, soy oil and sodium with you.

R: Yes, there should be fairness in trade. It seems like it would be beneficial if more products were made and sold locally in all countries.

J: Cheap american food much distorts the economy... most handicrafts are made from ag bi-products... kill ag, kill handicrafts. Next the local politician who has a Harvard MBA is “our man in wherever” who is advancing USA interests in that country, writing laws that benefit himself and the USA based Harvard MBAs.

R: So, I agree. it's a mess!  I'm curious as to what you think of this business model/idea/concept. Just met this guy, and I'm trying to wrap my head around it. See the value, but also poke holes. Thoughts?

J: the microloan thing has turned out to be not as advertised, and new iterations of development banks are coming up.  These programs all have the same elements: big money for the promoters, potemkin villages for public relations, debt trap for the villagers, but eventually it goes down in smoke as well.

There is a reason why the 3 major religions forbid “interest” .. any interest, any rate any time frame.  Any interest deal leads to trapping the borrowers. Trapped borrowers are not free.

The people these program purport to help do not need low interest loans, “education” or anything else.  They need freedom... free to contract, free from force or fraud.  ML King said the USA is the #1 source of violence in the world.  True.  Still is.  We generally back the bad guys.  The first thing we can do is bring the troops home.  The second thing we can do is start trading.

The Chinese are trading worldwide, with no troops, and getting good results.  All of those uprisings are against US-backed regimes, except for Libya, in which the uprising is usa backed.

It’s easy to pull money together for a program, very hard to make a business go.  Self-employment is necessarily self-transformation.  These people need us to behave ourselves, not give them a handout.

R: You’re right, those banks have not helped at all. Does that mean it is not humanly possible for there to be a business structure and strategy that could put profits and investments back into that very same community? And is it really not possible you can call it a bank? And it operates like a bank in ways that money is deposited, loans are offered, fdic insured. Or would it have to be called something other than a bank because that term is too egregious?

J: How do you define a bank?  if you mean the modern definition, then they will do for the town what BofA has done for America... unemployment, foreclosure, war, widening the gap between have and have nots...  you cannot make a drink with arsenic and expect good intentions to make a difference...  these aren't banks in the free market sense of the word.

Order naturally flows out of chaos, and if people are given freedom from intervention, and freedom to contract, they will work out a just and equitable polity.  In time they may give it up, as we have in USA, or in time it may be sustainable such as in Hong Kong.  Yes, learn what the good guys are doing, but don't accidently join the bad guys.






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